Germany backs export of coal-fired technology

Germany’s government will give financial support for the export of coal-fired power-plants by the country’s manufacturers, Sigmar Gabriel, the minister for economic affairs and energy, has ruled.

The issue has been at the heart of a dispute between the environment and economy ministries. Barbara Hendricks, the centre-left minister for the environment, nature conservation, building and nuclear safety, and Gerd Müller, the Christian Democrat minister for economic co-operation and development, have been trying to stop such exports and, crucially, to restrict financing from Kfw, the state development bank.

But Gabriel, who is the most senior social democrat in the coalition government, has over-ruled them. This week he sent a report on the financing of international coal to the parliament’s economy committee, the German newspaper Frankfurter Allgemeine Zeitung reports.

His ruling aims at ending arguments within the government over the promotion of coal-fired power plants. Such plants are considered potentially damaging to the environment because of the carbon dioxide emissions from coal. German manufacturers feared damage to their production and argued that their rivals outside Germany that were not bound by such restrictions would be at a competitive advantage.

Germany has set an energy policy whose ambition is ahead of other European Union member states. Meeting in October, the leaders of the EU’s member states adopted targets of a 40% reduction in emissions by 2030 from 1990 levels, but Angela Merkel, Germany’s chancellor, pushed for higher targets for efficiency and renewable energy.

To the purists’ eyes, continuing with the export of material for coal-fired power plants seemed to contradict an energy policy that aims at moving away from ‘traditional means’ of energy such as nuclear and brown coal and towards types of renewable energy such as solar and wind energy.

But the argument made by the manufacturers – including Siemens, ABB, Alstom and Mitsubishi – is that it will be impossible for many years to come for Germany to exclude coal completely. And that is all the more the case abroad, where it would be better if third countries used German-made power plants that have higher emissions standards than those made elsewhere. Indeed, they argue that German technology could help other countries achieve a transition to renewables, or Energiewende, along the German model. Gabriel seems to have been persuaded that there would be an environmental benefit from exporting coal-fired technology, as well as an economic benefit to Germany.

Some conditions would be set on support for German exports: the receiving countries should have a climate policy aimed at reducing CO-emissions. Investments in already-functioning plans would be permitted only if they meet certain efficient standards.

Some 20 years after liberalization, the EU’s electricity market conditions are completely different from those at the start of the century. Competition brought more efficiency, as well as new challenges for today’s market players.